Rand Health Insurance Flashcards
Rand Health Experiment
Large, social science experiment to study how individuals will use medical care under insurance. Took a large sample of people and followed them throughout several years to see how they are spending on health care.
Main Point of Rand Health Experiment…
Wanted to provide some estimates of the effect of insurance on the demand of medical care.
Argument of the Rand Health Experiment…
It is hard to rely on observational data because of endogenity problem.
Observational Data
Collecting data that already exists. Not always preferred.
Endogenity Problem
When data is biased or incorrect.
Rand Health Experiment is Relevant Because of the use of….
Random sample; people were randomized to different health insurance plans. Applied to broad range of services.
3 Main Finding of the Experiment Was….
- As coinsurance rate increased, use of medical care decreased.
- No statistical difference in inpatient expenses by insurance type. Will hit that cap/deductible immediately so insurance covered services.
- As copayment decreased, demand for care became more price inelastic (do not have to pay as much as more).
Health Effects of Experiment and Benefitted the Most…
- Only identified 3 health effects: blood pressure, myopia, and dental care.
- Poorer adults (20% income) that have increased blood pressure, myopia, and dental care have faced improvement under FFS plan.
Health Effects Conclusion…
We need to be careful to assigning health insurance in order to restrain costs and maintain health.